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Jack Lifton
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Jack Lifton is an Independent consultant and commentator, focusing on the market fundamentals and future end use trends of the rare metals. He specializes in the sourcing of nonferrous strategic metals and on due diligence studies of businesses in that space. His work includes exploration,... More
My company:
Technology Metals Research
My blog:
The Jack Lifton Report
  • Rare Metals Investment News Updates, Today's Edition (RareMINUTES) 050709 NEODYMIUM 8 comments
    May 7, 2009 6:19 PM | about stocks: LYSCF

    China has announced that it will triple the national goal, announced last year, of expanding its production of electricity from wind power to a total of 100 gigawatts installed and operating by 2020. This would make the generation of electricity from wind the predominant non fossil fuel burning production method in 2020 greatly exceeding the amount projected to be produced in that year from nuclear plants..

    China will signal that it is now actually commiting to producing 100 gigawatts of wind generated electricity by 2020 by placing this goal in its next two five-year plans as part of the official statement of the goals for the Chinese utility industry. If this happens then China's recent takeover of the Australian rare earth mining industry makes perfect sense. \ The Chinese, you see, like to make long term plans not only for economic goals but also for implementing the necessary steps in the value chain to achieve them.

    To make the most efficient, lightest weight, lowest service wind turbine generator of electricity takes one ton of the rare earth metal, neodymium, per megawatt of generating capacity. This to to build the neodymium-iron-boron permanent magnet necessary for the generator to function.

    The current production of neodymium is around 20,000 metric tons a year, and all of it is produced in China.

    The world's demand for neodymium for current uses is now in balance with production.

    If none of the world's current demand becomes obsolete, and in fact, if it grows then where is 100,000 metric tons of neodymium going to come from for China's projected 100 gigawatts of new wind generated electricity, if China opts for 100% neodymium-iron-boron permanent magnet type electric generators??

    The answer is simple: Australia.

    The two large rare earth mining operations now in the process of being acquired by Chinese companies, Lynas and Arafura, are said to be capable each of producing 20,000 metric tons of total rare earths per year; it is also said that one of them, Lynas, has higher than to be expected neodymium content in its ore body element distribution.

    One problem that had dogged investors in Lynas recently was that if it were brought into full production there might be a surplus of neodymium thus paradoxically dri... its price and the value of Lynas future production down.

    That problem may now be solved. The new Chinese wind power plan would be able to take 100% of the Australian production of Lynas of neodymium for ten years of full production. Thus the current neodymium market would not be impacted.

    Is this why the bank of China is so eager to extend a 250 million dollar guarantee to ensure that Lynas rare earth refinery gets built? Probably it is.

    Based on current and projected Chinese domestic production and current and projected use of neodymium for non Chinese wind power, batteries, and electric motors and generators for vehicles, vehicle accessories, and military use I predict that the price of neodymium will rise sharp;y throughout the second decade of the twenty-first century.

    The only possible non Chinese, or non Chinese owned, sources for neodymium for the open market now are the Americans, privately owned MolyCorp and privately owned Thorium Energy, Inc., and the Canadians, publicly traded Great western Minerals Group and publicly traded Avalon Rare Metals.

    For now it is still possible to buy shares of Australia's Arafura and Lynas. There is no indication of any immediate plan by their new Chinese owners to take them private, but they might just do that not too far down the road, and if the run up of neodymium has then begun those who were long term investors at that point will be in very good shape.

    Don't say I didn't tell you about this early on.

     

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Comments (8)
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  • Dipsy Doodle
    , contributor
    Comments (3) | Send Message
     
    Hello Jack,

     

    Why is the pricing for LYSCF.PK around $20 and many articles from other market place are about 10 - 20 times lower? See Alacrea store notes,
    "Chinese state- owned China Nonferrous Metal Mining (Group) Co Ltd agreed to acquire a 51.6% interest, or 700 mil new ordinary shares, in Lynas Corp Ltd, a Sydney-based gold and rare earth mining company, for AUD 0.36 (USD 0.263) in cash per share, or a total value of AUD 252 mil (USD 184.036 mil)"
    11 May 2009, 11:36 PM Reply Like
  • Eamon Keane
    , contributor
    Comments (311) | Send Message
     
    Hi Jack, as regards neodymium there is an interesting discussion at eurotrib:

     

    www.eurotrib.com/story...

     

    In particular I'd like to hear your thoughts on this comment:

     

    www.eurotrib.com/story...

     

    "Neodymium is not currently used in generators for the majority of wind turbines, though the process is beginning. The vast majority of turbines use doubly-fed induction generators using both traditional and innovative copper wiring.

     

    Neodymium is often used in gearless and hybrid turbines, particularly in the Chinese market through Goldwind's acquisition of 70% of German design firm Vensys. The Multibrid offshore turbine uses a permanent magnet generator, not certain if neodymium is used.

     

    Most standard configuration turbines do not use permanent magnet generators at all. An exception is the Clipper 2.5 MW turbine, where the main shaft is split into four load paths to four smaller permanent magnet generators. Again, unclear if neodymium is used.

     

    it is clear that one growing design trend in the industry is the use of permanent magnet generators, thus there will likely be more use of neodymium in the future.

     

    Skennah Kowa"

     

    If neodymium is not currently used in most wind turbines then it would seem that should any supply constraints develop from the current move to neodymium, manufacturers could simply switch back?
    17 Jun 2009, 07:40 PM Reply Like
  • Gareth Hatch
    , contributor
    Comments (135) | Send Message
     
    engstudent: the use of neodymium-based permanent magnet [PM] generator designs will likely increase, with the construction of off-shore wind farms. As commercial-scale wind turbines get larger and larger, their mechanical gear boxes and bearings are becoming more complicated and potentially problematic from a maintenance and reliability point of view. A PM generator system can reduce or even eliminate the need for the mechanical gearbox, thus significantly increasing the reliability and reducing the maintenance cycle - particularly for off-shore turbines.

     

    There are ongoing initiatives to improve the general design of turbine gear boxes, and that might make a "switch back" to non-PM designs more palatable should it be required.

     

    For more info, see these articles:

     

    * Why Are Wind Turbines Getting Bigger? - bit.ly/bS98N
    * How Does The Use Of Permanent Magnets Make Wind Turbines More Reliable? bit.ly/sbsx7
    * 10 MW And Beyond: Are Superconductors The Future Of Wind Energy? bit.ly/OgCSq
    8 Aug 2009, 02:49 PM Reply Like
  • Gareth Hatch
    , contributor
    Comments (135) | Send Message
     
    Apologies - the correct link for the second article is:

     

    * How Does The Use Of Permanent Magnets Make Wind Turbines More Reliable? - bit.ly/e1fyv
    8 Aug 2009, 02:52 PM Reply Like
  • Tekton
    , contributor
    Comments (29) | Send Message
     
    Well, that all changed, didn't it? the aussies shot down the Lynas deal and at least one other. Now it appears the Canadians are clearly out front, especially Great Western.
    27 Sep 2009, 05:49 PM Reply Like
  • elenora123
    , contributor
    Comments (3) | Send Message
     
    Love your site. Is there anything I can do to help YOU? I have been telling my friends to visit your site. Thanks to you, the information was unavailable. Now I am getting action. I can. Just let me know. Blessings and good wishes to all of you!! You are doing a tremendous service!
    Elenora
    foreclosed homes
    28 Oct 2009, 07:49 AM Reply Like
  • olbear101
    , contributor
    Comment (1) | Send Message
     
    I am really interested in lithium mining companys and like Panamerican
    lithium (canadian) but as it's on the TSX and not available to us Yankees.
    do you expect it to get on an american X soon?
    6 Feb 2010, 05:39 PM Reply Like
  • agori25
    , contributor
    Comment (1) | Send Message
     
    Can anyone please tell me what Neodymium co.s are trading in 2011 in the american market?
    13 Apr 2011, 02:28 PM Reply Like
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